The risk rally that was sparked after the conclusion of this week’s EU summit has continued strongly into today’s session, with both equity markets and EURUSD posting strong gains. The Nikkei is up +1.4% on the day, Hang Seng +1.9% and Shanghai Composite +1.3% at the time of writing. Meanwhile EURUSD has remained well bid, taking us to highs of 1.4247 late in the US session as US stock markets were surging.
The sense of optimism and heightened risk appetite has been encouraged not only by the relief that EU leaders are back on track to solve the Eurozone debt crisis, but also by the suggestion in an FT article today that China is “very likely” to offer financial assistance to Europe. China’s Vice Finance Minister Zhu confirmed that talks were underway with EFSF CEO Regling in Beijing, and if successful it would certainly add strong credibility to the EU summit plans.
Further good news yesterday came in the form of US Q3 GDP which managed to hit an impressive 2.5% QoQ annualized rate after last quarter’s disappointing 1.3% print. Even though this is only an advance reading and subsequent revisions may yield some adjustments, the strong baseline revealed yesterday categorically dispels the fears that have swirling about the US returning to recession this quarter.
In other news, the Riksbank kept interest rates on hold at 2.0% yesterday, in line with consensus expectations. Like many central banks that have had meetings in the past few weeks, the Riksbank downgraded its forecasts for growth and inflation over the coming year and now sees 2011 GDP at 4.2%, and 2012 CPI at 1.9%. Interestingly, there were two dissenters in the vote who wanted to cut the repo rate, and the statement had an overall dovish tone.
Coming up today we have a glut of Swedish data released (including retail sales and consumer confidence), along with Norwegian unemployment, Swiss KOF leading indicator, and later the US PCE figures for September and U.Mich consumer confidence.
By
M.Zohaib Gadit
Forex Trading Consultant
The sense of optimism and heightened risk appetite has been encouraged not only by the relief that EU leaders are back on track to solve the Eurozone debt crisis, but also by the suggestion in an FT article today that China is “very likely” to offer financial assistance to Europe. China’s Vice Finance Minister Zhu confirmed that talks were underway with EFSF CEO Regling in Beijing, and if successful it would certainly add strong credibility to the EU summit plans.
Further good news yesterday came in the form of US Q3 GDP which managed to hit an impressive 2.5% QoQ annualized rate after last quarter’s disappointing 1.3% print. Even though this is only an advance reading and subsequent revisions may yield some adjustments, the strong baseline revealed yesterday categorically dispels the fears that have swirling about the US returning to recession this quarter.
In other news, the Riksbank kept interest rates on hold at 2.0% yesterday, in line with consensus expectations. Like many central banks that have had meetings in the past few weeks, the Riksbank downgraded its forecasts for growth and inflation over the coming year and now sees 2011 GDP at 4.2%, and 2012 CPI at 1.9%. Interestingly, there were two dissenters in the vote who wanted to cut the repo rate, and the statement had an overall dovish tone.
Coming up today we have a glut of Swedish data released (including retail sales and consumer confidence), along with Norwegian unemployment, Swiss KOF leading indicator, and later the US PCE figures for September and U.Mich consumer confidence.
By
M.Zohaib Gadit
Forex Trading Consultant
No comments:
Post a Comment
Feel free to comment.